Abstract
This article argues that there might be important efficiency gains for countries to provide generous unemployment insurance benefits. Firstly, generous unemployment benefits might reduce the risks, real or perceived, associated with labour market transitions such as changing employer and/or career. Secondly, such benefits might increase workers’ skills levels, both by functioning as a form of insurance for workers’ investments in skills that are not easily transferable between employers and by facilitating the accumulation of skills that are developed through experience with different employers. These arguments are supported by empirical data, covering 14 countries, from the Eurobarometer survey.
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